I just don't get it.
I know the advantages of bonds: they are much safer than stocks, they give consistent payments, and the market fluctuations don't matter since you get your investment back at the end of maturity.
With the current 4+% yield it makes a lot of sense to directly hold some bonds, but bond funds seem like a different story.
Their value is constantly fluctuating, and you are not guaranteed to get your investment back since they rarely hold bonds until they mature. and if they are poorly managed, they could be forces to sell huge chunks of bonds at a loss like it happened in the UK 2 months ago.
i know that they are more diversified, but the downsides are severe. if I would want to invest in something that is volatile and doesn't guarantee I get my money back at the end but is diversified then why wouldn't I buy a stock etf instead?
Submitted December 02, 2022 at 04:29AM by sponge_hitler https://ift.tt/28wm3QZ
